The United Methodist Church voted against divestment last week, choosing to not add a fossil fuels investment screen to the Church’s Board of Pension and Health Benefits.
At the 2016 General Conference, a quadrennial gathering of the top policy-making body of the United Methodist Church, delegates of the Church’s Board of Pension and Health Benefits, or General Board, voted 258-461 against altering church law to screen out fossil fuel investments. The General Conference serves as a forum to “revise church law” and to “adopt resolutions on current moral, social, public policy and economic issues.”
According to Barbara Boigegrain, top executive of the General Board, the Church would be better suited to engage with companies, noting they “have more influence by working on the inside to change corporations’ behavior.” According to the News Service:
“If we divest with companies, The United Methodist Church loses a voice at the table,” Boigegrain said. She added that if General Conference approved a fossil fuels screen, to go with screens in place for private prisons, alcohol, munitions, tobacco and pornography, “nine to 15 percent of the investable universe” would be off limits to the pension fund. “It would greatly reduce our flexibility” in trying to support energy companies making positive change, Boigegrain said.
Rev. Amy Lippoldt, a Great Plains Conference delegate, also encouraged engagement over divestment, noting “responsible engagement is what the board is asking us to let them do – to let them stay at the conversation table until there is no other option.” In a May 3 announcement, the General Board also stated “experience demonstrates that the agency has significantly greater influence when it remains engaged with companies and active in drawing attention to these important issues—rather than selling shares and losing a voice for The United Methodist Church.”
Given the immense costs of divestment for endowments, it is not surprising the General Board has long held engagement as a more successful strategy. According the group’s 2014 Annual Report, “as a global investor with over $20 billion under management, the General Board is in a privileged position to use its voice— or ‘engage’—to influence change that favors our investments.” These investments not only provide critical benefits to active and retired members of the clergy and church, but also enable the General Board to invest in programs that benefit communities and the environment. These efforts include the Positive Social Purpose (PSP) Lending Program, a program that has enabled the church to finance affordable housing loans for numerous communities across the country. According to the report, the board has funded loans “totaling more than $1.8 billion and resulting in the creation of more than 47,000 units of affordable housing. PSP loans help make safe, decent and affordable housing available to individuals and families who otherwise may not have access to a basic human need: shelter.”
The Methodist Church is also focused on four key areas of philanthropy, including “addressing the causes of poverty and responding in ways that lift up individuals and communities” and “fighting diseases such as malaria and AIDS and promoting initiatives that improve well-being,” including the fundraising of nearly $75 million by 2016 to defeat malaria. As many academics have highlighted in the past, fossil fuels play a critical role in supporting these efforts. According to the International Energy Agency:
Access to affordable and reliable energy services is fundamental to reducing poverty and improving health, increasing productivity, enhancing competitiveness and promoting economic growth. This is because it is essential for the provision of clean water, sanitation and healthcare, and provides great benefits to development through the provision of reliable and efficient lighting, heating, cooking, mechanical power, transport and telecommunication services.
Luckily for the United Methodist Church, its pensioners and philanthropic goals are well funded thanks to a diverse financial policy that includes investments in the energy sector – a key sector for a diverse and robust investment strategy. It is clear a policy of engagement is far more beneficial than a symbolic, empty act like divestment.